In the land of the rising stock market

Plus: Nvidia Corp.’s soaring valuation and more [Bloomberg]( This is Bloomberg Opinion Today, a nutritious salad of Bloomberg Opinion’s opinions. [Sign up here](. Today’s Must-Reads - [Ken Griffin](! China needs you (and Citadel). - We’re [strongmen](! Let us entertain you. - Good luck writing off [Russia](. - The [bling]( of the future. - [Faust](, your kids and their phones. What’s Japanese for Rational Exuberance? In my last newsletter, I wrote that Japan — along with the UK — was an [archipelago of anxiety](. The weakness of the yen, a technical recession, plus the country losing its spot in the world’s top economies to Germany (which isn’t going gangbusters either) was part of the angst. There was good news this week, however: The Nikkei 225 finally broke the record high it set in December 1989. Though the index is well known, it has been overtaken in importance by the Tokyo Stock Price Index or Topix. Still, [says](John Authers, “corporate fundamentals are generating real optimism” that “Japanese stocks can continue to rally.” My London colleague Marcus Ashworth — who worked as a trader in Japan in the late 1980s — is almost [speechless](. Almost. “After quadrupling over the past decade, and rising 16% in 2024 so far, the burning question is whether this is another bubble moment or genuinely part of a proper renaissance. Forgive me for making this personal, but I'm a believer!” Gearoid Reidy [agrees]( in his column “Congratulations Nikkei, Now Don’t Screw It Up.” He says, “This might not be a fleeting affair.” Still, Gearoid writes, “Japan needs to find a way to maintain the momentum.” That includes keeping foreign investor interest going. That’s been helped so far, he says, by “an intriguing pressure campaign to induce firms to boost their valuations that has captured the imaginations of global money managers.” Asset managers, [says]( Shuli Ren, are enthralled by Japan’s “perfect macro backdrop for equities — an economy that is growing but not so fast that the Bank of Japan has to tighten. … Money has to be deployed somewhere, and China burned them badly in recent years.” Still she warns, “Japan also has a long track record of disappointments — just not in the dramatic fashion that China displays. In 2013, foreigners poured in about $155 billion. ... Their euphoria was gradually deflated by a painfully slow wait for the BOJ to hit its perpetually unattainable 2% inflation target.” She concludes: “Investors should revisit history and tread carefully.” Tainan and the New Gilded Age Lionel Laurent [says]( the age of tech largesse continues to burgeon with Nvidia Corp.’s soaring valuation. He writes: “If the AI optimists are right and we’re on the cusp of a new industrial revolution — or ‘tipping point,’ as [co-founder Jensen] Huang put it, after Nvidia’s results smashed forecasts — productivity gains and economic growth will be felt beyond the billionaires’ club.” Huang’s now one of the richest people on the planet. Lionel also points out an interesting coincidence: Huang’s cousin Lisa Su, head of Advanced Micro Devices Inc., is now worth $1.2 billion. They were both born in Tainan in Taiwan before their families moved to the US (the Huangs made a first stop in Thailand). Along with much of Taiwan, they are thus ethnic Han Chinese and have some fluency in Chinese languages (among them, Mandarin and Hokkien). That doesn’t mean they are sympathetic to the People’s Republic, even if their corporations do business with China-based concerns. I dare you to start an argument with anyone from Taiwan about that. Which reminds me of US Senator Tom Cotton’s recent questioning of TikTok Chief Executive Officer Shou Zi Chew, insinuating that the ethnic Chinese, Singapore-born executive was a functionary of the Communist Party that rules the mainland. It was a McCarthy-esque version of “But where are you from, really?” Singaporeans were not pleased. Nvidia’s Huang and the CEOs of Intel Corp. and Micron Technology Inc. have been [invited](to testify before a US House of Representative Select Committee on China. Let’s see what happens then. Telltale Charts “HSBC Holdings Plc reported a record $30 billion pretax profit for 2023, but its shares still tumbled on Wednesday because fourth-quarter numbers were marred by several charges totaling nearly $6 billion. The good news is the UK-based bank still had plenty of spare cash to hand out to investors and will have more to pay out this year. The less-good news is that HSBC will have to work harder to generate cash returns next year and beyond.” — Paul J. Davies in “[HSBC Still Rolling in Cash — At Least for Now](.” “China is tightening the grip over quantitative trading after experiencing its own version of a ‘quant quake,’ a reference to the summer of 2007 when a number of high-profile and successful US-based hedge funds suffered outsized losses. … This episode shows how inexperienced the Chinese quants are. … [T]hey were not baptized by the likes of Citadel [Securities], which relentlessly sifts out untalented traders and portfolio managers.” — Shuli Ren in “[China Has a Quant Quake Because There’s No Citadel](.”  Further Reading The poster child of [tax arbitrage](. — Matt Levine What’s your [poison](. — Howard Chua-Eoan Don’t cry for me, [Peronista](. — Juan Pablo Spinetto Heat-pumps go [flat](. — Chris Bryant Seven [Samurai](versus Magnificent Seven. — Gearoid Reidy Walk of the Town: Following the Money to Copenhagen Regular readers of the Friday Opinion Wrap know of my obsession with Copenhagen. I was in the city at the beginning of the month and was heartened by how flush everything seemed, especially since a number of the biggest Danish companies were buffeted by bad news in November. Was it just because the city’s top restaurants were seeing a flood of foreign visitors, a benefit of the lavish three-day tribute by two-starred Alchemist to legendary Spanish chef Ferran Adria’s El Bulli? While the storms haven’t completely passed, this week, John Authers [apologized]( for slighting the country’s stock market, agreeing with a reader that it has “outperformed even the US / S&P 500 over the last two decades.” Still, investors should take a breath before thinking of jumping in. John points out that a huge portion of the bourse’s value is tied to a single stock, Novo Nordisk, the creator of diabetes/diet drug Ozempic. Nevertheless, a capped version of Denmark’s benchmark index might be worth keeping an eye on. At Alchemist in Copenhagen, a video tribute to El Bulli spirals heavenwards on the vaulted ceiling. Photograph by Howard Chua-Eoan/Bloomberg You could certainly see how Danish money is spent at Alchemist.  The opening night feast I attended was astounding, with a spiraling video of El Bulli’s 1,846 culinary creations spinning heavenward as 52 guests — including the Danish tycoon Lars Seier Christensen and his wife, Yvonne — watched. Christensen, the major investor of the Copenhagen restaurant, sat at dinner enjoying his part in making it all happen. Drawdown Thanks for hanging out with me. Have a healthy treat. ”Can the rest be gravy?” Illustration by Howard Chua-Eoan/Bloomberg Notes: Please send protein substitutes and feedback to Howard Chua-Eoan at hchuaeoan@bloomberg.net. [Sign up here]( and follow us on [Instagram](, [TikTok](, [Twitter]( and [Facebook](. 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